Chattanooga-made Atlas family is Volkswagen's No. 1 seller as automaker sees hot U.S. sales in 2nd quarter

Staff file photo by C.B. Schmelter / Volkswagen Group of America President and CEO Scott Keogh speaks after the 2020 Atlas Cross Sport was revealed at the Volkswagen assembly plant.

Led by the Chattanooga-built Atlas family of SUVs, Volkswagen of America's second quarter was its best since 1973 as the automaker joined other car companies in putting up red-hot sales numbers.

Also, Volkswagen's ID.4 electric SUV, which went on sale earlier this year and is slated for assembly in Chattanooga in 2022, is the most profitable vehicle that VW dealers are selling, said Scott Keogh, Volkswagen of America's chief executive.

"The car is turning extremely fast," he said during a conference call, adding the ID.4's second quarter sales hit 5,756. "Supply is tight coming from Europe."

Keogh said the Chattanooga assembly plant, which employs over 4,000, should start making pre-series versions of the ID.4 any day and the vehicle is on track for production of dealer SUVs in the second half of 2022.

Duncan Movassaghi, Volkswagen of America's chief sales and marketing officer, said the Atlas family is starting to make up "a significant portion" of total sales and now is the company's No. 1 seller.

Movassaghi said the company is "an SUV brand now," with the share of all its sport utility vehicles hitting 73% of total sales last quarter.

According to VW, the company's May sales in the U.S. were more than 44,000, its best single month since 1973 when the Beetle was popular.

This quarter, SUVs such as the Atlas and Atlas Cross Sport are driving sales with 39,377 units of the two vehicles sold. That's up 141% over the same period last year, though the comparison is against a 2020 quarter when the coronavirus pandemic was in full swing.

Still, VW sales were 120,520 in the quarter, up 72% over 2020, and 211,373 for the first half of 2021, up 46%, the company reported.

"We're seeing a very strong comeback for the VW brand," Keogh said.

Other automakers with Tennessee production facilities also booked big increases in sales in the quarter.

General Motors posted a nearly 40% jump in sales for the second quarter versus the same period a year ago.

Nissan reported a 68% jump in second-quarter sales to 298,148 vehicles.

Hyundai Motor Co., which has major operations in Alabama, reported its best-ever second quarter as it sold 240,005 vehicles, up 69%, from a year ago.

Toyota, which is building a new production plant with Mazda in nearby Huntsville, Alabama, posted a 73% climb in second quarter sales.

But Keogh added there are "speed bumps in supply" for the VW brand for the rest of 2021 given the shortage of semiconductor chips which is hindering production, including in Chattanooga which just ramped up assembly after a two-week suspension.

At the same time, the company official said Volkswagen of America could see just as strong a second half, which would place the company at over 400,000 in sales.

"It would put us in a place it hasn't in a long, long time," Keogh said.

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